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If you are in the market to buy a home, and are considering a home that’s subject to a Homeowner’s Association, you are probably aware that you will have to pay monthly HOA dues plus comply with the HOA’s rules.


There is another KEY factor and sometimes it’s hard to find. What I’m talking about is whether the HOA is involved in litigation of some sort or is about to be involved in litigation. This may be against the original builder, a vendor they used for maintenance or repairs of the common areas, or the City, or etc. In a lawsuit, the HOA may run up extensive legal and/or research fees and that could lead to an increase in the monthly HOA dues. There may also be construction defects that you need to be aware of.


You need to contact the HOA and ask if there is any current litigation or are they even considering litigation. You also need to very carefully review the HOA disclosure package that the seller is required to give you. We had one recently where out of hundreds of pages, there was one sentence at the bottom of one page that disclosed a lawsuit, with instructions to contact their office to get the full package of hundreds of pages more. It was only because I was aware of the lawsuit from a prior escrow that I was able to be on guard for this and ask for the full package. It would have been very easy to miss. Also review all the HOA board meeting minutes as they may discuss it there. Be on your guard if the minutes show them going into, “Executive Session” where minutes are not kept. They may be discussing a potential lawsuit at that time. It’s also a good idea to talk to some neighbors for further due diligence.


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